July 18, 2012

Dewey & LeBoeuf -- The Clock Is Ticking

Partner/shareholders of bankruptcy Dewey & LeBoeuf can get a foretaste of what to expect if they read today's American Lawyer Daily: "Howrey [bankruptcy] trustee Allan Diamond requested Bankruptcy Judge Dennis Montali's approval to subpoena 70 law firms for information related to how much work they received when they collectively hired at least 211 Howrey partners in the months before and after the firm's demise. The list of those being targeted includes several partners who launched their own practices, as well as those who were part of larger group moves to Baker Botts, Baker & Hostetler, Jones Day, Pillsbury Winthrop Shaw Pittman, Winston & Strawn, and other firms."

For those without a mega-law firm bankruptcy scorecard, Howrey LLP was a 500+ person law firm that was pushed into an involuntary bankruptcy last year. Dewey & LeBoeuf's unsecured creditors, like Howrey's, will want their money back. And solvent former partners and their current firms provide juicy targets.

Here's betting that most of these cases will be settled quickly and relatively quietly. Even though the firms on the receiving end of Allan Diamond's subpoenas can muster plenty of firepower, I don't think they'll care to spend a lot to save a little (or even to save a lot). After all, it was--and still is--only about the money.